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Primary surplus, revenues beat targets

January-May budget figures show tax collections fetched 140 million euros more than expected By Sotiris Nikas

The budget’s primary balance and its revenues have beaten their targets according to the deficit figures for the year’s first five months released on Tuesday by the Finance Ministry.

The primary budget surplus amounted to 707 million euros in the year to end-May, compared with a target for just 208 million euros. The total balance of the budget, including interest payments, showed a deficit of 1.99 billion euros against a target for 2.55 billion.

Tax revenues beat their target by 140 million euros, reaching 16.06 billion. This was thanks to the better-than-expected performance of the collections of corporate income tax by 274 million euros or 57.8 percent, of the property tax by 23 million euros or 2 percent, other direct taxes by 7 million euros, value-added tax by 22 million euros, and other indirect taxes by 22 million euros.

The revenue categories that missed their targets in the January-May period were income tax from households, by 95 million euros or 4 percent, the special categories income tax by 36 million euros, the special consumption tax on energy commodities by 14 million euros, the other special consumption taxes by 36 million euros, other consumption tax by 22 million euros, and revenues of the program to enhance cash flow due to the credit crisis by 29 million euros, or 33.4 percent.

Tax rebates in the year to end-May amounted to 1.26 billion euros, exceeding their target by 85 million euros, while Public Investments Program revenues amounted to 2.3 billion euros, against a target for 2.31 billion.

On the expenditure side, spending was contained by 641 million euros more than the budget target. Even the financing of social security funds, which usually causes the biggest headache, was within the framework set by the budget.

The only form of public spending that missed its target was that for the Public Investment Program, by 113 million euros, but given the declared intention to support investments in the country this can only be a welcome development. Furthermore, by the end of May, the Finance Ministry had only distributed 169 million out of the 525 million euros set aside for the so-called social dividend (the handout to vulnerable social groups from last year’s primary surplus).